ON THE SCENE: Following the money

July 17, 2014

If you were asked to investigate the KGB for money laundering, would you do it? Jules Kroll, founder and former chairman of the world's largest private detective agency, Kroll Inc., did just that on behalf of former Russian President Boris Yeltsin.

Perhaps it comes to us as no surprise that he discovered they stole a lot of money, as he would say, serious money, way more than Ferdinand Marcos stole from the Philippines. Kroll was not surprised that the then-KGB was never held accountable, nor that its then-officer Putin is now president of Russia.

Adirondack Roundtable breakfast discussions are always engaging at the Lake Placid Institute for the Arts & Humanities, filled with insights, in this case into the naughty ways of some corporate and government crooks. Not to mention the fantastic view from the top floor of the Lake Placid Conference Center.

Article Photos

Jules Kroll, speaker, and Beth Amorosi, whose grandfather James B. Donovan will be the subject of the next Adirondack Roundtable(Photo — Naj Wikoff)

On Saturday, July 12, Kroll was the opening speaker of the Institute's 2014 summer series and will be followed by John Donovan speaking of our own Cold War warrior, his father, James B. Donovan this coming Saturday. Donovan and his family were long-time members of the Lake Placid Club.

Asking a packed audience what type of corporate corruption was most investigated, Kroll was surprised to have the first response be correct: Insider trading. "Why do you think," he asked, "because it's the easiest to prosecute?" Kroll isn't into easy money. He likes to follow it, hunt it down and, if he can, retrieve as much of it as can be got. Along the way, he encourages policy changes to make it more difficult to steal money. He's been successful. Having financial thugs aided and abetted by banks in a certain country famous for mountains, chocolate, and pretty good cheese, though, irks him. Nor have banks on Caribbean islands known for snorkeling and James Bond film sets, or even some of our U.S. banks, been as helpful to his investigations as he would wish.

"Jules Kroll is a remarkable American," said Jack Vogel, founder of the Vanguard Group, as he introduced Kroll. "Innovative, he has done great social good, primarily because way back in 1972 he invented a new business that didn't exist before: the modern corporate investigations business. Kroll first learned about kickbacks while working with his father in the printing business. You want to do some printing? Give us some money! We call that grift. His father had to pay those kickbacks to get work. That made Jules pretty angry."

Angry indeed. After finishing law school and working as an assistant DA, Kroll returned to his father to help him with his business. From there, Kroll started his own corporate investigation business. He enjoys saying that his career was launched thanks to "The Hulk" and "Spiderman."

"I asked myself, 'What would be most interesting to speak about today?'" said Kroll. "My first thought was, 'Should we discuss intricacies of the bond-rating business and fee structures and what we can look forward to in the exciting world of bond ratings?' After giving that some thought, I checked with my wife. She said, 'That's a really bad idea.' Coming on to 46 years of marriage, she's heard a lot of really bad ideas!"

With an opening like that, the audience knew they were in for an entertaining discussion. Kroll did not disappoint. We learned that for 42 years he has identified public policy problem areas, including national corruption and the despoiling of many of our financial institutions that have in some respects behaved like criminal enterprises helping crooks to hide money.

Results are not quick, says Kroll, given as example the 13 years he has been chasing down "a couple of fugitives who, having stolen eight to ten billion dollars, have become more and more expert at laundering and hiding it with the active assistance of leading financial institutions that you've read about-shocking as that may be-some having French names, some Swiss names, but they are not alone. Some American institutions haven't behaved that well either."

"The very most fun thing for me has been identifying those situations, then figuring out how to find the very best people to make common cause and go after them," he said. "You see something that's going wrong. When enough people in the private sector get together to fix it and you garner sufficient expertise, then you have a chance. It's a matter of getting the right leadership."

Kroll has gone after 47 former heads of state, including Baby Doc.

"There is no reason that we as a country have to 'take it' from people who use our banking system, our legitimate businesses to disadvantage others," he said.

"I thought Kroll's presentation interesting," said Stephen Shin. "He was well spoken about a side of reality you never hear about: investigations into corporations and governments. I wanted to ask him if he ever fears for his personal safety. Going after powerful heads and former heads of state and corporations, do you ever look behind your back?"

"I am much more optimistic than when I started," said Kroll. "I would say from this little example of the Marcoses, we now have many, many investigations into political corruption. These countries can really get taken to the cleaners in terms of their resources. So I feel there has been improvement in some areas. I think we have lost ground in how certain major financial institutions, particularly the foreign institutions, feel it's fair game to go in and cheat like this, to work with crooks-and they do. They view them as just another class of depositors."

"That was one of the best Roundtable discussions I have participated in," said Vogel. "I learned that you can be a missionary and do some good for society."

"I thought Kroll was fantastic! He gave us a broad view of what he does and what needs to be done to fight corporate and institutional government corruption. He made the information accessible," said Mara Jayne Miller. "And he made us feel that change is possible."

"He has sort of a Columbo approach to things," said Institute President Charles Noth. "Very laid back, very soft, so you don't see him as a threat. But you can tell he gets to the bottom line. He goes in, grabs what he needs and makes things happen."

Next week's Roundtable discussion will be about James B. Donovan, a lawyer who, with the Soviet government, negotiated the return of the American U-2 spy plane pilot Gary Powers and, with Cuba under Fidel Castro, negotiated the release of American prisoners captured in the Bay of Pigs. Don't miss it on July 19, 8:30 a.m., Lake Placid Conference Center.